Douglas Goldstein, CFP®, is an investment advisor, president of Profile Investments (www.profile-financial.com) and host of the personal financial radio show, Goldstein on Gelt. Buy his new book on Kindle: Building Wealth: Investing in Stocks. Securities are offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, SIFMA. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. He can be reached at doug@profile-financial.com. Follow Doug on Twitter: @DougGoldstein.

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Pitfalls to Avoid in Your Retirement Planning Process

Apart from building up your retirement savings plans, there are other ways to make sure that you will be well provided for as you grow old.

Be cautious and careful as you plan ahead.

During the decades of our working lives, we dream of a successful retirement, spending time enjoying favorite activities. But if you aren’t careful, retirement may replace work worries with the worries of belt-tightening and outliving your money.

Here are some common pitfalls to avoid as you prepare for retirement:

Make every effort to avoid high-interest debts, such as credit cards and overdraft, lest your retirement nest egg gets depleted by covering past purchases. All types of debt, including mortgages and car loans, should be repaid before retirement.

Don’t touch your retirement savings. While it may be tempting to withdraw some money and promise yourself you’ll repay yourself, resist the temptation to borrow against your future. If you can’t make ends meet on your current income, how can you possibly repay a loan on a smaller pension check?

Build up some emergency savings. You never know what may happen. Having several months of living expenses squirreled away for the unknown will hopefully eliminate the need to toCredit: Image: Ambro / FreeDigitalPhotos.netuch retirement savings.

Develop a long-term investment strategy. Don’t change your investments based on the latest financial news. Accept that investments have their ups and downs, and remember that even with all the stock market turmoil, it may still be reasonable for you to have some risk exposure. If you are unsure about appropriate risk levels or which long-term investments are the best for you, consult with a financial adviser, and always remember that past performance is no guarantee of future returns. Read my article on risk management in retirement for further tips and advice.

A financial plan is different from an investment strategy. A good financial plan is a “roadmap” that leads you down decades of life. Sit down with your financial planner and see what you can work out together. Take into account possible future income, such as your job prospects and possible inheritances, and expenses, such as marrying off your children and any debts you need to pay off.

If you follow the above tips, hopefully you will pave over many of the pitfalls of retirement planning. All of the above should not only make your retirement much easier, but hopefully make the path that much smoother.

Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.